Chad Halcom
CRAIN'S DETROIT BUSINESS
Published: August 18, 2014 1:43 pm ET
Updated: August 18, 2014 1:46 pm ET
Image By: Catherine Kavanaugh
Cheong Choon Ng
Wixom, Mich.-based Choon’s Design LLC, makers of the popular Rainbow Loom bracelet making kit, will proceed with patent infringement lawsuits against several companies, now that a rival toy and craft company has lost a bid to invalidate that patent.
Choon’s Design late last month resolved a challenge to its 2011 patent for Rainbow Loom by Randolph, N.J.-based LaRose Industries LLC before the federal Patent Trial and Appeal Board, an agency of the U.S. Patent and Trademark Office.
Choon’s Design, co-owned by inventor-engineer Cheong Choon Ng and wife Fen Chan, is suing LaRose and retailer Toys R Us Inc. in a separate patent infringement lawsuit before U.S. District Judge Terrence Berg in Detroit, and three other companies in separate cases. No date is set for a trial in the LaRose case, although pretrial discovery is expected to continue into 2015.
But LaRose, makers of the similar Cra-Z-Loom and other Cra-Z-Art toy and stationery products, brought a challenge to the Trial and Appeal Board a few months after Choon’s lawsuit and sought to invalidate the patent. The board denied the challenge in part and instituted the patent in May; the companies reached an agreement in July that settled another part of the case.
At issue is Ng’s design for Rainbow Loom, a plastic tool for making bracelets and other items from small rubber bands. The company has contended in court that imitation loom kits have flooded the market, including Cra-Z-Loom.
“My attorneys told me we should [go to court] in order to tell people not to copy us, and many would not fight but would drop out — which was true, a lot of them were small places importing a cheaper China product, and they had no interest in [litigation],” Ng said this week.
“But obviously some of the loom makers have big companies behind them, and those are more difficult to fight.”
Ng has said previously he developed the Rainbow Loom in 2010 after watching his daughters, then 12 and 9, twist ponytail bands into rubber band bracelets. After realizing the market potential of it, he and Chan invested their $10,000 life savings to bring it to market.
The company has won four Toy Industry of America awards since the product launch in 2011, grew to reported revenue of $44 million in 2013. Choon’s Design claims between 6 million and 7 million unit sales since the original product launch in late 2011.
Ng also said since the Rainbow Loom, his company has also sought to patent Monster Tail, a smaller and more portable loom that also makes bracelets, as well as a new Finger Loom that could reach the market within weeks.
The ruling from the patent board preserves his Rainbow Loom patent, and with it his standing to sue LaRose and at least three other companies.
Ng said he still hopes to resolve the litigation soon.
“We’re trying to end this as quickly as possible. We are not interested really in suing people, but we want to keep refreshing the product, so that the fun factor [for customers] will continue,” he said.
Choon’s Design has brought at least eight patent lawsuits between early 2013 and April of this year, four of which have been settled or dismissed.
“With the incredible success behind the Rainbow Loom, it was inevitable that copycats would try to profit off Choon’s work,” attorney John Siragusa of Birmingham IP law firm Carlson, Gaskey & Olds PC said in a statement.
“Now we can move forward knowing that the U.S. Patent Office has held the patent to be valid and take the appropriate steps to defend his rightful intellectual property against these imitations.”
Ralph Selitto Jr., shareholder at Greenberg Traurig LLP in Florham Park, N.J., and attorney for LaRose Industries and Toys R Us in the Detroit lawsuit, declined to comment on the USPTO case Thursday. | 
